- WE'RE JUST RANDOM SPECKS OF DUST IN A TORNADO TO THE MARKETS .......

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Wednesday, 11 May 2011

Hitting Resistance

If this is just a counter-trend rally then we have now reached the obvious reversal area on multiple indices. A reversal here might however just be an overbought retracement on equities and wouldn't necessarily indicate a major reversal targeting new lows. On ES the resistance trendline I posted yesterday has held with a small pinocchio and there's both a small rising wedge and negative divergence on RSI to suggest a reversal here. On a break up the obvious next reversal area for a new high would be in the 1390 area:

NQ has also reached a resistance area and is looking rather overbought. A break to a new high would target the 2455 area:

I've had a few requests to start adding regular looks at the RUT / TF to my daily write-ups and I'm starting that today. TF has broken up through the resistance zone I was watching, but the broken and retested short term rising wedge, and negative divergence on hourly RSI are both promising for a reversal here. On a break up the obvious target area would be 878-880:

I've been watching copper carefully to see whether it could break up through strong resistance at 408.5. So far it is failing there and I'm expecting some sideways trading to hit declining resistance in that area. It's looking weak this morning though and if equities reverse today we could see copper test 390 support:

I'm expecting this silver bounce to peter out and fail well before making a new high and silver has hit the 38.2% fib retracement overnight. It could well reverse here, though there's no negative divergence on the hourly RSI yet to support a reversal:

Just a short post today as I've been having some computer issues this morning. I'm leaning short today unless we see a convincing break up. If we do see a convincing break up then I'd expect new highs on equities across the board in the near future, though new highs on commodities would still look extremely unlikely.

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